Embracing the self-employed could be one of the best moves for the economy
While British politicians have announced plans to help people manage the cost-of-living crisis, the Tory leadership contenders and the Labour Party have ignored one of the most innovative parts of the UK economy: the self-employed. If they create proactive policies that embrace the self-employed instead, more British households might survive the Cost of Living Crisis.
That’s according to IPSE, the independent worker lobby and membership group. After two decades of growth, there were sharp falls in self-employment during the COVID-19 pandemic from a peak of 5 million at the end of 2019 down to 4.2 million in early 2022, largely driven by IR35 pushing people out of self-employment to become umbrella company employees.
Self-employed workers were among the hardest hit by the pandemic and their incomes and businesses have still not recovered. In fact, a report from the LSE published earlier this month found that more than 40% of self-employed had monthly incomes of less than £1,000 – compared with 27% at this income level pre-COVID-19.IPSE
How can government support self-employed when inflation rises?
With the cost-of-living crisis worsening, it is clear that changes to inflation could seriously damage those freelancers on the lower end of the pay scale, warns IPSE. Furthermore, the self-employed membership group says for those on higher wages, the rise in inflation poses problems for how they can pay their energy bills, their mortgage, child-related, higher education and other household costs.
In the face of record high petrol and diesel prices that are a significant driver behind increases in the cost of living, IPSE has called on the Chancellor, as well as the Tory leadership candidates to increase mileage allowance from 45p to 90p per mile.
“We have also called on them to think about the self-employed when they implement their plans to tackle the cost-of-living crisis,” says Andy Chamberlain, IPSE’s Director of Policy. “If they don’t, then they will have jeopardized one of the most innovative and dynamic parts of the UK economy and risked its ability to bounce back post-COVID-19.”
Chamberlain says IPSE will continue to represent its members and the wider self-employed on the cost-of-living crisis, regardless of who wins the Tory leadership election.
How to cope as a freelancer in a financial crisis
🎧 In the meantime, it might be worth taking some tips from someone who has already weathered a financial crisis. Ruth Wilson, a freelancer who is a television producer, director and editor as well as a qualified life coach, spoke to IPSE in this podcast about her experiences during the 2008 financial crash and how she had to adapt her expectations as a budding freelancer during that period and where that mindset has taken her business today.